China misses 2014 trade growth target

China's foreign trade missed its annual growth target for the third straight year in 2014, underlining persistently weak external and domestic demand, customs data showed Tuesday.

But the structure of trade in 2014 showed positive signs, and the outlook for 2015 will be brighter as the global economy picks up, giving more leeway for Chinese policymakers to push through their reform agenda to balance the economy.

Total trade grew 3.4 percent from a year earlier in dollar terms, undershooting its annual growth target of 7.5 percent, data from the General Administration of Customs (GAC) showed on Tuesday.

This is the third consecutive year that China has fallen short of its foreign trade growth target. It is unknown whether China will lower its trade target significantly during the annual national legislative session in March.

Exports rose 6.1 percent year-on-year in 2014, while imports increased only 0.4 percent, the data showed.

"China's trade growth is shifting gear from high speed to medium and high speed, and the trade structure is in transition," customs bureau spokesperson Zheng Yuesheng said at a press conference in Beijing.

Zheng attributed 2014's weak foreign trade data to the slow recovery of the global economy, losing competitiveness in low-cost products, declining foreign investment in China's manufacturing sector as well as falling commodity prices.

The leading index for exports dropped 0.7 percentage points month-on-month to 40.1 in December 2014, the third straight month of decline and the lowest since December 2013, indicating export growth in the first quarter of 2015 still faces pressure, the GAC data shows.

"The weak performance in 2014 is related to the government's effort to restructure the economy," Cai Jin, a vice chairman of the China Federation of Logistics & Purchasing, told the Global Times on Tuesday.

China's economic growth slipped to 7.3 percent in the third quarter from a year earlier. Next week China is due to release the overall GDP growth figure for 2014. It is likely that the target, set at 7.5 percent, will be missed for the first time since 1999.

China's top leaders have said on various occasions that China needs to adapt to a "new normal" in the pace of economic growth and avoid using aggressive stimulus measures.

"There is room for import trade to improve if developed countries lift their restrictions on exporting high-tech and sophisticated products to China. The odds are good of an expansion in exports to emerging economies such as East Asian and African countries as they have promising market potential," Cai said.

Growth in China's bilateral trade with emerging markets, including ASEAN members and African countries, Russia and India outperformed that of the total trade in 2014.

The proportion of China's trade with these regions accounted for 20.2 percent of total trade in 2014, up 0.8 percentage points from 2013.

"Implementing the 'One Belt and One Road' plan will give a boost to China's exports, which are expected to improve slightly in 2015 and grow at around 7 percent," Lian Ping, chief economist at the Bank of Communications said in a research note e-mailed to the Global Times.

The "One Belt and One Road" strategy, which refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road, was proposed by President Xi Jinping in late 2013. It was designed to strengthen the infrastructure as well as economic and trade ties with countries and regions along the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

Positive signs emerged in 2014 in terms of improving the efficiency and structure of foreign trade, Zheng said.

General trade in 2014 grew 4.2 percent from a year earlier, accounting for 53.8 percent of total trade, up 1 percentage point, while processing trade only rose 2.8 percent, taking up 32.7 percent.

"While traditional trade has suffered, exports of high-end products are promising as China's export structure upgrades," Cai said.

Wang Guofeng, general manager of start-up Shanghai Jinghong Robot Co, told the Global Times the company's exports of service-oriented robots, used domestically, are expected to double in the next two years.

"The company's exports to US and Europe in 2015 will reach more than 10 million yuan ($1.6 million) and are likely to double in 2016 considering the booming orders from clients and upgrades to our navigation technologies which will increase the functionality of robots," Wang said.